Official: Russian Government in No Panic over External Debt Market

Russia sees no reason to panic over possible U.S. sanctions against Russia’s public debt, although they may have a negative impact on the Russian market, according to Konstantin Vyshkovsky, head of the external debt department at the Finance Ministry.

“Obviously, it would be sly of us to say that the rhetoric of sanctions and potential introduction of sanctions against the public debt will not have a negative impact on our market, will not complicate the issuer’s ability to attract borrowed resources, primarily on the domestic market, of course. This is not the case,” he said at the third Moscow Financial Forum, according to RIA news agency.

“The negative influence is here. We all see how anxious the market participants are amid regular news that the introduction of sanctions on the Russian public debt is being discussed. At the same time, in our opinion, there is absolutely no reason for panic,” Vyshkovsky added.

According to the official, despite the significant share of non-residents in the Russian public debt, even in case of the most stressful scenario (when most of non-residents are not able to acquire Russian securities because of sanctions on the Russian public debt), the Finance Ministry sees no reason to think that the domestic Russian public debt market will suffer greatly.

Vyshkovsky expressed confidence that the Finance Ministry, even with such a scenario, will be able to implement its borrowing program.

While facing U.S. sanctions, Russia also needs extra budget revenue to meet economic goals set out by Putin when he began a new six-year term in the Kremlin in May. The government has already announced plans to raise value-added tax from 2019 and increase the retirement age.